Distance learning–—that is, providing education to students who are separated by distance and in which the pedagogical material is planned and prepared by educational institutions–—is a topic of regular interest in the popular and business press. In particular, MOOCs (Massive Open Online Courses), which are open-access online courses that allow for unlimited participation, as well as SPOCs (Small Private Online Courses), are said to have revolutionized universities and the corporate education landscape. In this article we provide a nuanced analysis of the phenomenon of online distance learning. We first provide an overview of its historical evolution, and subsequently define and classify key concepts. We further discuss in detail the optimal target group in terms of participating students and teaching professors and propose corresponding frameworks for driving intrinsic student motivation and for choosing a successful online teacher. We also outline the benefits that institutions can achieve by offering online distance learning. Finally, we speak about the specific connection between online distance learning and social media by focusing on the difference between MOOCs based on traditional lecture formats (xMOOCs) and connectivist cMOOCs.

1. Higher education and the digital revolution:
About MOOCs, SPOCs, social media, and the
Cookie Monster
Andreas M. Kaplan *, Michael Haenlein
ESCP Europe, 79 Avenue de la Re´publique, F-75011 Paris, France
1. Course objective
‘‘Just because you haven’t found your talent
yet, doesn’t mean you don’t have one.’’
— Kermit the Frog
Those of us born in the ‘70s or later share a set of
childhood friends. You may not always think about
them, but Kermit the Frog, Bert and Ernie, and the
Cookie Monster–—to name just a few of the Muppets
living on Sesame Street–—have shaped the lives of
millions of children. They taught us how to spell
(think of the ABC-DEF-GHI song), how to count
(remember the frightening Count von Count), how
to sing (such as the Grouch Anthem, Grouches of the
world, unite. . .or was it Users of the world, unite?),
Business Horizons (2016) 59, 441—450
Available online at www.sciencedirect.com
ScienceDirect
www.elsevier.com/locate/bushor
KEYWORDS
Academia;
Business schools;
Distance learning;
Executive education;
Higher education;
MOOC;
SPOC;
Social media;
Teaching;
University
management
Abstract Distance learning–—that is, providing education to students who are sepa-
rated by distance and in which the pedagogical material is planned and prepared by
educational institutions–—is a topic of regular interest in the popular and business press.
In particular, MOOCs (Massive Open Online Courses), which are open-access online
courses that allow for unlimited participation, as well as SPOCs (Small Private Online
Courses), are said to have revolutionized universities and the corporate education
landscape. In this article we provide a nuanced analysis of the phenomenon of online
distance learning. We first provide an overview of its historical evolution, and subse-
quently define and classify key concepts. We further discuss in detail the optimal target
group in terms of participating students and teaching professors and propose corres-
ponding frameworks for driving intrinsic student motivation and for choosing a success-
ful online teacher. We also outline the benefits that institutions can achieve by offering
online distance learning. Finally, we speak about the specific connection between
online distance learning and social media by focusing on the difference between MOOCs
based on traditional lecture formats (xMOOCs) and connectivist cMOOCs.
# 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights
reserved.
* Corresponding author
E-mail addresses: kaplan@escpeurope.eu (A.M. Kaplan),
haenlein@escpeurope.eu (M. Haenlein)
0007-6813/$ — see front matter # 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.
http://dx.doi.org/10.1016/j.bushor.2016.03.008

2. and other important things in life (‘‘Stoplights and
love can be cruel’’). What might be less known
is that behind these entertaining lessons was a
rigorous pedagogical curriculum. Sesame Street,
supported by the Carnegie Corporation and Ford
Foundation, was designed as a preschool education-
al program tailored specifically for TV, a program
that would help to fight against the violent and
commercial television content that was much more
prevalent at the time. Looking back, we can say
that it indeed achieved this goal, particularly for
children living in economically disadvantaged areas
(Kearney & Levine, 2015). In this sense, Elmo may
have been the first teacher–—other than your
parents–—you ever encountered.
When most of us were growing up, few people
talked about the disruption of the education sector,
and even those who did most likely considered the
idea as hypothetical, something that might happen
‘‘in the distant future.’’ Yet, over the past 15 years
or so, the situation has changed. Industries such as
music and travel have already been fundamentally
altered by the Internet. Now the emergence of
online distance learning for business schools and
universities at large–—learning in which the peda-
gogical material is planned and prepared by educa-
tional institutions but students are not physically
present at those institutions–—seems to be doing the
same to the domain of education, a process that is
facilitated by firms such as Coursera and Udacity.
Clayton Christensen from the Harvard Business
School, who coined the term ‘disruptive innovation’
in 1995, believes that the emergence of new edu-
cational formats such as MOOCs (Massive Open
Online Courses) and SPOCs (Small Private Online
Courses) will fundamentally shake up business
schools and other higher education institutions in
the next decade and lead to bankruptcy for many of
them–—an assessment that has also been supported
by other researchers (Liyanagunawardena, Adams,
& Williams, 2013). And, given that the influence of
the higher education sector extends to numerous
aspects of society and government (Pucciarelli &
Kaplan, 2016), innovation in this sector is likely to
indirectly affect other industries as well. In fact,
new educational formats may even have a direct
effect on all companies and organizations; for ex-
ample, a MOOC developed by a top-tier university
could easily be integrated into any in-house execu-
tive training or corporate university free of charge.
The combination of cost effectiveness combined
with the flexibility it gives to executives to fit
training into their busy schedule–—since they no
longer have to attend traditional face-to-face
sessions–—makes it likely that more and more corpo-
rations will prefer digital over traditional solutions.
In this article we provide a more detailed analysis
of online distance learning. And to stay within the
spirit of the theme, our article is structured like a
traditional syllabus: We start by providing a brief
overview of the course content (i.e., the history of
distance learning) before providing definitions and
classifications of the key terms. We then look into the
target audience, or the types of students for whom
online distance learning might be particularly rele-
vant, as well as the type of professors suited for
developing the content for these courses. We contin-
ue by outlining the learning goals–—key benefits that
business schools and universities can achieve by de-
veloping an offering in this field–—and we identify the
factors towhichthey need topayparticular attention
if they decide to do so. Our article concludes with
some thoughts on the evaluation of the various facets
of online distance learning and the specific chal-
lenges that arise when combining online distance
learning with social media applications.
2. Course content
2.1. History of distance learning
The history of higher education can be traced back
to ancient Greece, where Plato founded his acade-
my roughly 2,400 years ago. At that time, however,
and for the next 1,400 years or so, higher education
was limited to a precious few. Only in the Middle
Ages did larger scale universities begin to appear in
Bologna (1088) and in Paris, where the Sorbonne was
founded in 1150. However, despite the change in
scale, these universities worked in nearly the same
manner as the first academies did: Students met in a
physical space in order to listen to a professor, who
usually spent his time lecturing–—that is, reading a
predefined text–—to transmit knowledge. Although
such settings can still be observed today (just think
of some of your undergraduate courses), the inven-
tion of the printing press by Gutenberg in 1439 dis-
rupted the higher education sector for the first time
by making books cheaper and more widely available.
In this sense, printed books can be seen as the very
first precursor of distance learning, although the
earliest printed books lacked a crucial component:
the involvement of a pedagogical institution in the
preparation and planning of content.
In fact, the historical evolution of distance learn-
ing can be divided into three main periods corre-
sponding to the media used: printed materials,
television, and the Internet, respectively. Distance
learning in its true sense first appeared in 1728 when
the Boston Gazette featured an advertisement for a
distance stenography course through weekly classes
442 A.M. Kaplan, M. Haenlein

3. sent by mail. This new idea was perfectly suited for
a society that was in the process of being trans-
formed by the Industrial Revolution. From that
point, distance learning extended easily to other
domains such as composition (offered in 1833 in
Sweden), foreign languages (1856 in Germany),
and the preparation of coal miners to become fore-
men (1890 in Canada). It also allowed education to
truly abandon the concept of physical distance with
the London School of Economics offering correspon-
dence courses to students in Australia.
Since then, the concept of distance learning has
not changed dramatically, although the emergence
of new media has helped to make it more efficient.
In 1969 the Open University was founded in the UK as
the first institution that augmented correspondence
learning through mail and TV, with short residential
courses and supporting classes at different physical
locations. This represented a milestone for the start
of the second period of distance learning, charac-
terized by the use of interactive TV instead of
printed materials as a key medium. On the applica-
tion deadline of August 4, 1970, the Open University
received 42,000 applications for 25,000 places. Ses-
ame Street, which premiered on November 10,
1969, is another example of a TV-based distance
learning program, as discussed above: the show’s
pedagogical curriculum was designed by the Harvard
professor Gerald Lesser.
The arrival of the Internet and its use for educa-
tional purposes marked the third period in the
history of distance learning. Specifically, in 1989,
20 years after the premiere of Sesame Street, the
University of Phoenix launched its online campus,
which offered an entire curriculum of bachelor’s and
master’s degrees online. The term MOOC was coined
in 2008 by Dave Cormier from the University of
Prince Edward Island in Canada with regard to a
course called Connectivism and Connective Knowl-
edge, which was followed by 25 in-house students
paying a tuition fee and 2,200 non-paying external
participants. This first MOOC also made ample use of
several social media applications, such as blogs,
forums, Facebook, Second Life (Kaplan & Haenlein,
2009), and Wikis (Kaplan & Haenlein, 2014). The
idea then spread like wildfire so that 2012 was pro-
claimed ‘‘The Year of the MOOC’’ by the New York
Times.
2.2. Definition and classification
As suggested above, for the purposes of this article
and in accordance with commonly accepted con-
ceptualizations (e.g., Keegan, 1998), we define
distance learning as any form of providing educa-
tion to students who are separated by distance
(i.e., who are not physically present in the same
space) and in which the pedagogical material is
planned and prepared by an educational institu-
tion. In addition to being separated by space, dis-
tance learning students can also be separated by
time; that is, they may learn at their own pace, in
accordance with their schedules. Such separation
by time is referred to as asynchronous distance
learning, and the alternative (simultaneous study)
is referred to as synchronous distance learning.
Distance learning can be facilitated by a wide range
of media, including, but not limited to, letter cor-
respondence, radio, TV, telephone, or the Internet.
It can be enhanced by other elements, such as the
existence of bidirectional communication or the
requirement that students be taught individually
versus in groups.
In the following we focus on two specific types of
distance learning conducted online–—MOOCs and
SPOCs–—which differ primarily in the sizes of the
student populations to which they cater. A MOOC is
an open-access online course (i.e., without specific
participation restrictions) that allows for unlimited
(massive) participation. Many MOOCs provide inter-
active elements to encourage interactions among
students and between students and the teaching
staff, although the latter is not a defining require-
ment. A SPOC is an online course that only offers a
limited number of places and therefore requires
some form of formal enrollment. SPOCs frequently
have a competitive application process and might
charge a tuition fee.
These definitions enable us to classify online
distance learning applications according to two di-
mensions: the number of participants and the de-
gree of time dependency (see Table 1). MOOCs, in
addition to being unlimited in size, traditionally
include students who are separated both by space
and by time, enabling students to learn indepen-
dently at their own pace without the requirement to
stick to a specific schedule. Some massive online
courses, however, require all students to be ‘pres-
ent’ at the same time, for example, due to the use
of live streaming or the requirement of group work
done in real-time online. The term SMOC (Synchro-
nous Massive Online Course) is used to refer to these
courses. In a similar spirit, when referring to classes
for which the number of participants is limited, we
use the term SSOC (Synchronous Small Online
Course) to refer to courses in which all students
must participate in real time, and SPOC otherwise.
The two dimensions of class size and time depen-
dency can be complemented by other classification
characteristics, such as the ability to earn credits
(degree vs. non-degree awarding course) or whether
attendance is free or fee-based.
Higher education and the digital revolution: About MOOCs, SPOCs, social media, and the Cookie Monster 443

4. 3. Target audience
3.1. Student population
In principle, the possibility to learn without being
dependent on time and place and at nearly zero cost
makes participation in a MOOC suitable for every-
one, although there are some limitations in this
respect (see details on this below). Whether all
MOOC participants actually graduate successfully
from the course is a different issue altogether.
Following through on a MOOC or a SPOC requires
a relatively high level of intrinsic motivation and
self-discipline. Successful graduates therefore tend
to be older (in the range of 25—30 years) and already
hold a first degree (80%), which they obtained
through more traditional means. For most partic-
ipants, a MOOC is therefore primarily a way to build
new skills in order to strengthen an existing profes-
sional career.
Given this observation, what can online distance
learning providers do to increase the attractiveness
of MOOCs for a larger population and to make them a
medium that can truly educate the masses? Based on
prior research in the field of intrinsic motivation and
academic success (Gottfried, 1985; Rieber, 1991),
we propose the following 5C framework to drive
student intrinsic motivation (see Figure 1):
Commitment: Make students more committed to
their online education by creating the feeling of
belonging to a larger group. Achieving such com-
mitment may be as easy as allowing participants
to observe others (e.g., by displaying a list of
names of students who are currently attending
the MOOC). If necessary, such features can be
enhanced by allowing interaction among partic-
ipants, and between students and the professor,
through live chats or virtual study groups.
Challenge: Create a MOOC that is feasible for
large numbers of people, yet is still challenging.
This can be a difficult task if there are thousands
of students without formal participation require-
ments. Adaptive learning–—that is, using learning
diagnostics to adjust the pace of the class for each
student on an individual basis–—can be helpful in
this context.
Control: The more control participants have over
their environment, the more successful they tend
to be. This is why asynchronous MOOCs that pro-
vide full control over when and where to learn
tend to work better than synchronous ones. Yet
providing control can take other forms as well
(e.g., allowing students to personalize their own
interfaces).
Competition: While collaboration is good, people
also love to compete against each other. So give
them the chance to do so by giving out points and
badges or organizing games and tournaments.
Table 1. Classification of online distance learning applications
444 A.M. Kaplan, M. Haenlein

5. Such features allow participants to see how they
are progressing toward their goals and to compare
themselves with others in their peer group.
Contemporaneous: Try to stay up-to-date by
adapting the course to what is happening at the
moment. In addition to offering pre-recorded
lectures, monitor exchanges between partic-
ipants to identify interesting questions and post
a short video to respond–—or simply post about
something you read in the news yesterday that
might be relevant.
3.2. Teaching staff
If online distance learning is not for any type of
student, it is certainly not for any type of professor
either. Similarly to the manner in which an increasing
focus on publications has created star researchers
who tend to earn higher salaries (Neely, Tribunella,
Tang, Hull, 2008) and are constantly courted by
other institutions–—particularly in the business school
landscape–—it seems likely that a stronger focus on
MOOCs will produce star teachers whose brands in-
creasingly become disconnected from those of their
institutions. In some universities, such a phenomenon
might lead to a more balanced view of the relative
importance of teaching and research.
In principle, this trend is not new since textbooks
always made some names more famous than others.
But now it will be possible for students all over the
world to truly experience those star teachers–—and
to compare them to the ones at their home
institution. This can lead to a world in which each
institution has some selected star faculty members
who are surrounded by supplementary professors
mainly serving as tutors and coaches who put the
lectures into perspective.
The key question in this context is how institutions
can identify those faculty members with star appeal
or help the ones on the edge to make the jump into
fame. For this, we mirror our 5C framework to drive
student intrinsic motivation and propose the fol-
lowing 5C framework to choose a successful online
teacher:
Charisma: To run a successful MOOC, professors
should be charismatic as well as telegenic (i.e.,
have a good on-screen appearance). A natural
means of identifying such people is to look for
those who already have excellent evaluations in
traditional classes. And don’t forget that not every
charismatic person in your faculty will actually be
eager to appear online, so some convincing may be
necessary.
Competence: The online teachers you pick should
be experts in the fields in which you would like to
build brand awareness and brand equity (more
details on this in the next section). While it is nice
to help one of your faculty members to become a
rock star, the primary objective should be to
position your institution on the worldwide map
in the right manner.
Constancy: Focus on people who are likely to stay
at your institution if their MOOCs become a suc-
cess. This means that you might want to prefer
tenured and more senior faculty over younger
ones. Building a star takes time and money, and
you should avoid investing these resources for the
benefit of your competitors. And note that com-
petitors can be numerous in this area, since not
only rival universities might compete for your star
professor, but also private corporations. LinkedIn,
for example, recently acquired Lynda.com, an
online learning provider, in the spirit of becoming
a full-fledged professional development network.
Compensation: A successful MOOC can be the kiss
of death for a traditional course a person has been
teaching for years. This makes the issue of com-
pensation a crucial one. Focus on a combination
of a one-time fee (to compensate for the effort of
Figure 1. 5C frameworks for target audience selection
Commitment
Challenge
ControlCompetition
Contemporaneous 5C
framework
to drive
intrinsic
student
motivation
Charisma
Competence
ConstancyCompensation
Contribution 5C
framework
to choose a
successful
online
teacher
Higher education and the digital revolution: About MOOCs, SPOCs, social media, and the Cookie Monster 445

6. building the MOOC) and some recurrent compen-
sation every time the course runs over subsequent
years. The latter should decrease over time to
avoid paying forever for an online course pre-
pared a decade ago. Depending on your national
legal copyright framework, there might also be a
need to pay the professor a fixed fee per partici-
pating student.
Contribution: Finally, realize that your star might
not want to (and should not have to) do it all
alone. Add support teaching staff to the mix who
can run tutorials or engage with the participants
online. The fact that a MOOC is online does not
eliminate the need for and the benefits of a good
teaching assistant.
4. Learning goals
4.1. Benefits
There are various reasons why developing a MOOC or
SPOC might make sense for a university or distance
learning provider. In what follows we provide
a structured overview of the key objectives and
benefits that can be achieved by online distance
learning. We present our framework as a Sesame
Street-style ABC song.
4.1.1. Ameliorate your cost/revenue ratio
While producing a MOOC is not cheap (see details on
this below), it can still result in substantial cost
savings–—for example, for courses that are taught in
several sections in parallel over the year or in
different locations. The latter applies to institutions
such as INSEAD, which has campuses in France,
Singapore, and the United Arab Emirates, or ESCP
Europe Business School, with campuses in Berlin,
London, Madrid, Paris, Turin, and Warsaw. A MOOC
can also help to ensure sufficient coverage rates of
permanent professors (who happen to be more ex-
pensive than external lecturers) in a cost-efficient
manner, which might be of importance if your busi-
ness school is accredited by EQUIS or AACSB (Kaplan,
2014). Furthermore, offering a MOOC can also cre-
ate potential for new revenue, for example, if you
charge a tuition fee for courses that count toward a
certified degree or licensing fees if other institutions
use your MOOC for their own teaching.
4.1.2. Build brand equity and brand
awareness
Branding is important, not only when selling mobile
phones and consumer goods, but also when selling
education. Universities today find themselves in an
increasingly competitive environment and in a con-
stant struggle to attract the brightest students, the
best faculty members, and the most attractive en-
dowments. A MOOC in the right area can help to put
your institution on the map and differentiate it from
others, similarly to a viral marketing campaign
(Kaplan Haenlein, 2011b) or an effective adver-
tisement. This makes the choice of the topic–—be it
entrepreneurship, sustainable development, or
cross-cultural management–—highly strategic.
4.1.3. Create flexibility and choice
MOOCs, especially those that are licensed from
other institutions, enable your institution to offer
courses and choice in areas where it might not have
an appropriate level of expertise. Several institu-
tions, such as Georgia State University, offer similar
credit for courses taken online than they do for
courses taken in a traditional manner. MOOCs also
offer students flexibility in terms of when they can
take certain prerequisite courses. ESCP Europe Busi-
ness School, for example, offers online catch-up
courses for students with no prior experience in
business administration to prepare them for enter-
ing its Master in Management program.
4.1.4. Develop pedagogical innovation
It goes without saying that online distance learning
is a key step to developing more modern forms of
teaching. It allows for flipped classrooms, in which
the traditional knowledge dissemination step is con-
ducted online and class time is used for discussions.
The significant amount of data that can be collected
from students participating in a MOOC can be used
to develop a personalized adaptive learning experi-
ence, and even an entire personalized study curric-
ulum. Anant Agarwal of edX, for example, thinks the
standard four-year undergraduate degree could be
replaced in the future by a one-year online course,
followed by two further years of study on-site, and
finalized by a fourth year based on blended/hybrid
learning in which students combine online and phys-
ical on-site courses to allow them to work part time
in a company. This curriculum is adapted to each
student on the basis of data collected during the
learning process in the first year.
4.1.5. Extend education and democratize
knowledge
An argument frequently put forward in the popular
press is that MOOCs allow everyone in the world to
obtain a top-tier education. While this is true in
principle, there are at least two caveats to this: First,
success in a MOOC requires a certain student profile,
as mentioned above. Second, there is a need for
a relatively sophisticated technical infrastructure,
446 A.M. Kaplan, M. Haenlein

7. especially high-speed Internet, which might not be
available in the most remote places of the world.
Online distance learning is therefore particularly
attractive for countries in which there is a significant
gap between the development of a technological
infrastructure–—be it fixed line or mobile–—and the
physical availability of space in educational institu-
tions.
4.2. Quality assurance
While quality assurance is important for any type of
teaching activity, it is even more important for a
MOOC that is available on a global scale and might
be joined by thousands of people. This is especially
true given that MOOCs are generally a winner-takes-
all market: In the end, only the best MOOC in any
given subject, language, and level of difficulty is
likely to survive, and will probably be adopted by
everyone. This creates disproportionally high re-
turns for offering the highest quality product. But
quality assurance will have to go both ways: At some
point, when online distance learning is fully estab-
lished as a piece of the education landscape, it
might be necessary for institutions to limit partici-
pation in their MOOCs or at least avoid giving out a
diploma to anyone who passes the final exam. Uni-
versities’ survival is dependent, among other fac-
tors, on the quality of their alumni, and it might not
make sense to subject physical on-site students to
rigorous scrutiny while providing open access to
online participants. This idea is consistent with
prior literature that considers MOOCs to be more
compatible with non-selective post-secondary ed-
ucation than with highly selective higher education
(Hoxby, 2014).
All these considerations raise the question of how
to design the perfect MOOC that fulfills as many of
the benefits as possible while at the same time
having a chance of being the winner in the market.
Two elements are of particular importance in this
context: First, a MOOC is more than a filmed lec-
ture. A good MOOC usually consists of several 10- to
12-minute videos filmed through different camera
angles, interrupted by questions and short quizzes,
which are graded automatically. Developing a
MOOC is a skill similar to producing a movie, which
explains in part the relatively high costs involved.
Second, the distribution platform needs to be as
user-friendly and intuitive as possible. It must en-
hance the online course and not distract the user
from following the content. Thus, any gimmicks
must be chosen carefully to avoid overloading the
experience. And it must be scalable, of course.
Otherwise, it might all come crashing down when
40,000 students try to edit your Google spreadsheet
at the same time–—which is what happened to
Coursera in an early version of its Fundamentals
of Online Education course.
5. Evaluation criteria
5.1. Student assessment
In order to offer a truly comparable alternative to
traditional education, online distance learning pro-
viders will need to deliver formal certificates or
diplomas for at least some of their courses. This
raises the question of how to ensure that the person
who followed the course is the same as the one who
took the exam. A traditional solution, used by sev-
eral providers, is to conduct exams in person in a
physical test center. Udacity and edX, for example,
have entered a partnership with Pearson VUE, a
subsidiary of Pearson Plc., that owns 4,000 test
centers in 170 countries. More creative alternatives
include recording examinees by webcam or using
software that compares typing styles with the pat-
terns previously recorded in the context of in-class
exercises. While none of these solutions can truly
rule out the risk of cheating, they can limit it to an
extent comparable to that faced in traditional edu-
cation.
5.2. Return-on-investment (ROI)
Once an online distance learning course is certified,
the next hurdle is getting it recognized by external
stakeholders. Some universities accept credits
from externally developed MOOCs for their own
degrees–—asinthecaseoftheprivateJohn F. Kennedy
University in California, which accepts credits ob-
tained through edX–—allowing students to combine
traditional and online distance learning. In the
future such a process could be formalized, possibly
through a system similar in spirit to the European
Credit Transfer and Accumulation System (ECTS),
which allows credits to be transferred between
universities in Europe. Other online distance learn-
ing providers focus on getting validation from the
job market. Coursera, for example, has its own
career service that puts its brightest MOOC partic-
ipants in touch with companies. In the end, even a
series of successful MOOC completions is not a
guarantee for a job–—but the same holds true for
a degree from any institution. Nevertheless, what
online distance learning providers might lack in
brand equity, they compensate for with the fact
that their students tend to have a higher degree of
self-discipline and motivation compared with those
leaving the traditional system.
Higher education and the digital revolution: About MOOCs, SPOCs, social media, and the Cookie Monster 447

8. While numbers vary widely, the general estimate
is that developing a MOOC generates costs in the
range of $30,000—$300,000, depending on the num-
ber of people involved (teams can range from a
handful to up to 30 people per MOOC), the quality of
the video material, and the potential need for
programming add-on content such as games or
tournaments. Combine this with the significant
dropout rates (only 10% of students starting a MOOC
actually finish it) and online distance learning starts
to look like a junk bond. But don’t forget that a
MOOC might be followed by 10,000 people, so 10%
of them graduating–—and potentially paying a fee–—
is still a decent number. Also, there are likely to
be significant non-financial benefits (see our ABC
framework of online distance learning benefits
above), especially if the MOOC is in the right area
and therefore helps to build brand equity and brand
awareness. While it may be difficult to accurately
determine the ROI of a MOOC, it is likely to be a
much better investment than one might initially
think.
6. Digital and social media use policy
While online distance learning has already obtained
an established place in the education landscape, it is
likely that the importance of MOOCs and SPOCs will
increase even further in the future. The next gen-
eration of students who are knocking at your door
are digital natives, bringing with them a unique set
of opportunities and challenges (Pucciarelli
Kaplan, 2016): Not only are these future students
more comfortable substituting a MOOC for a tradi-
tional face-to-face lecture, but they also expect
social media applications and user-generated con-
tent in general to be integrated into offline classes
as well. Microblogging applications such as Twitter
(Kaplan Haenlein, 2011a), for example, are al-
ready used to extend discussions beyond the class-
room and to allow students to exchange or tweet
their reactions to reading assignments. It is still
largely unclear how the process of opening up course
content to the public sphere is expected to influ-
ence academic freedom, privacy laws, and intellec-
tual property rights.
Interestingly, a stronger focus on social media
applications is also expected to impact the design of
MOOCs in the future. The vast majority of today’s
MOOCs are structured as weekly sequences of ac-
tivities in which instruction is provided by videos or
filmed lectures, supported by supplementary read-
ings and assignments. Even MOOCs that are asyn-
chronous are usually cohort-based in the sense that
they are offered over a fixed period of time (6—10
weeks on average) in which each participant is
expected to complete activities within a certain
time window. MOOCs based on traditional lecture
formats are commonly referred to as ‘xMOOCs’–—a
term inspired by Harvard University, which used
the prefix ‘x’ to indicate (offline) courses in the
university’s course catalogue for which online ver-
sions were available. Some xMOOCs have online
discussion forums that allow participants to engage
with one another, but, as mentioned above, such
interactions are not essential or integral to the
course.
Combining MOOCs with social media platforms,
which facilitate the creation and exchange of
user-generated content (Kaplan, 2012; Kaplan
Haenlein, 2010), will lead to the emergence of
Table 2. Comparison of xMOOCs and cMOOCs along 5Ps
448 A.M. Kaplan, M. Haenlein

9. connectivist MOOCs, referred to as ‘cMOOCs.’ Social
media applications constitute a central part of the
cMOOC since they allow participants to create ped-
agogical materials–—via blog entries, tweets,
podcasts, and the like–—that can subsequently be
commented on and further enhanced by other par-
ticipants. Instead of providing a formal curriculum,
cMOOCs offer a set of course materials that
each student can use, repurpose, and extend as
necessary. This strong focus on collaboration and
cooperation among students represents a funda-
mentally different teaching philosophy from the
one underlying the xMOOC. In a cMOOC environ-
ment, the professor no longer fulfills the key func-
tion of transmitting knowledge; instead, she
focuses on facilitating interactions. Table 2 pro-
vides a comparison between these two types of
MOOCs.
7. Concluding information
‘‘Me do anything for cookie — Cowabunga!’’
— The Cookie Monster
Now, coming back to our initial question, what does
all of this mean for the future of the education
industry in general and business education in par-
ticular? Look at the webpage ‘‘No-Pay MBA’’ to get
some idea. This site offers the possibility to combine
MOOCs offered by top business schools such as
Harvard, Yale, MIT, and Wharton into a curriculum
equivalent to that of a full-time MBA program, for
less than $1,000. A full program consists of 14 core
courses, 3 electives, and 4 concentration electives.
A student can begin the program at any time (ad-
missions are on a monthly basis) and complete it
within 18—24 months. In addition, members of No-
Pay MBA take courses together and work in small
groups on projects to replicate the feeling of be-
longing to one cohort of MBA students. They have
video conferences among themselves and video
meetings with professors. Although the MBA is not
accredited (yet), the offer sounds rather convinc-
ing.
Offers such as this have the potential to shake up
the education industry as well as in-house training
for employees and executives in the corporate en-
vironment. In this sense it seems as though, as
mentioned in the beginning, some of the 13,000
business schools in the world will need to close down
in the coming years. The schools particularly at risk
are the ones that are already not well-ranked and
the ones with low brand equity. Other schools might
decide to become more specialized. Even today, top
law students aim for Harvard, future investment
bankers target Wharton, and students interested
in cross-cultural management opt for ESCP Europe
Business School. This trend of specialization will
most likely become increasingly prominent in the
future.
So does this mean that traditional business
schools and universities as we know them today
should be considered as the dinosaurs of the educa-
tion area that will die out soon? Probably not. Look
at the music industry, for example. Although mp3s
have largely replaced the traditional CD, live con-
certs are still important, potentially even more than
they used to be. Watching a star such as Britney
Spears (Kaplan Haenlein, 2012) live on stage will
always be better than seeing her on YouTube–—and
the same will be true for online distance learning.
But other issues that the music and film industries
have to deal with on a daily basis–—file sharing,
illegal downloading, and users not paying licensing
fees–—will probably also apply to the education
sector in the future and create a whole new set
of challenges.
In the end, education is only one reason why
students decide to attend a university. Other rea-
sons include socializing (think of the things that you
did in your freshman year, and spent your subse-
quent years trying to forget), gaining life experien-
ces, and building a professional network. These
functions are unlikely to be taken over by online
distance learning providers. The same applies to all
those past students who met their future spouses
while sitting in a boring lecture next to them. As
always in life, just listen carefully to what the
Cookie Monster has to say: ‘‘Sometimes me think
what is love, and then me think love is what last
cookie is for. Me give up the last cookie for you.’’
Sharing cookies online is just not the same as sharing
cookies in real life.
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